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Dukestate, Other/Just Looking in Minneapolis, MN

In minnesota can a mortgage broker offer an Exclusive Buyers representation agreement for a real estate agent?

Asked by Dukestate, Minneapolis, MN Sun Jul 1, 2012

I have come across a friend who was going to the bank to get pre approved for a loan, and the loan officer had asked him if he had an agent. The guy had said no, and the lender asked if they could recommend one. At that time with all the paperwork for getting pre approved for the loan the lender also had the client sign an exclusive buyers representation agreement for a real estate agent who was not even present at the time. Can this be done in minnesota ?

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6
Dukestate, This example raises a lot of concerns.. From State license law to RELATOR ethics issues to possible RESPA issues, I would not feel comforatable as an agent being involved with something like this until I spoke to the Department of Commerce and an attorney. If your friend is uncomfortable I am sure the Department of Commerce could begin to give some direction.
0 votes Thank Flag Link Tue Jul 3, 2012
Often when a buyers representation agreement is signed, the buyer will also sign an 'agency' agreement. If you didn't sign an 'agency agreement' at the same time, it could be a violation of law as agency has to be signed in a timely manner and three months is not in a timely matter. Agency is a document that is separate from the buyers representation agreement.

Also the agent that held the buyers representation agreement would have to sign and date the document. I should think that the commerce department would frown on pre signed and pre / post dated documents but it would be their call.
0 votes Thank Flag Link Mon Jul 2, 2012
There would be a problem if there were a kickback, but just referring an agent isn't illegal. However having what, from your story, seems to be a pre-signed contract, might be a problem. If the agent is with a large agency, you could call his office supervisor. If you don't get an answer, the Dept. of Commerce certainly can tell you if this is OK or not.
0 votes Thank Flag Link Mon Jul 2, 2012
It's been three months since the contract was signed and he's just getting a call now. I spoke with some lawyers they said this is the first they have ever heard of someone doing this. They think it might break RESPA if compensation is being given. They also said to call department of commerce if the ageny won't drop the contract or have the lawyers deal with it.
0 votes Thank Flag Link Mon Jul 2, 2012
Did the real estate agent pre-sign the agreement? This is very odd, but I can't see how it's not legal. Of course, I'm not a lawyer and if you think this is a problem, you could ask a lawyer. Is your friend unhappy with this agent? If so, check the language on the buyer's representation agreement to see if he can break the contract. Quite often, either side can do so with three days notice and a letter.

Stephanie Fox
Coldwell Banker Burnet
spfox@cbburnet.com
612-728-2204
0 votes Thank Flag Link Mon Jul 2, 2012
Dukestate,

It doesn't feel right, but I can't put my finger on the actual statute that says someone else can't enter into a contract for you as a real estate agent. The contract is ultimately between the buyer and the broker anyway.

It is possible that the loan officer is licensed through the same broker, and it is also possible that the loan officer is delegated from the real estate agent to act on his behalf - much the same as an assistant would be. For things to be valid an agency relationships in real estate contracts form would need to have been explained and signed.

RESPA might also play into a situation like this if there is any sort of compensation passing between the agent and the loan officer. State statute as well for that matter if compensation is passing.

Cameron Piper
Coldwell Banker Burnet
licensed MN Broker
612-839-4202
0 votes Thank Flag Link Mon Jul 2, 2012
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